The report gathered insights from more than 500 medium to large businesses in the United States, United Kingdom and Europe. Nearly all, 92 percent, said reducing carbon emissions is an “urgent” priority for their organization and 89 percent view carbon credits as a valuable tool to mitigate greenhouse gas emissions that their organizations can’t yet eliminate.
All respondents said their organizations already have or are working towards science-based climate targets. Their approach is to use carbon credits to complement — not substitute for — long-term decarbonization, including switching to renewable energy, electrifying transport and cutting energy use.
The survey's findings contradict a common criticism levied against carbon credits: that companies use them as a license to continue business as usual. It shows companies taking a "yes and" approach to decarbonization — investing in carbon credits to drive immediate climate action, while working across the board to cut emissions.
"Climate change is the greatest test of collective action in human history, and a crisis of that scale demands an all-hands-on-deck, all-of-the-above strategy," said Conservation International CEO M. Sanjayan.
"Carbon credits are a proven tool for immediately reducing emissions, while also pursing longer-term decarbonization ambitions," he added. "And though it isn't always reflected in the headlines, this study affirms that private-sector buyers are indeed gravitating toward high-quality credits, placing a premium on transparency and accountability."
- Further reading: 3 myths about carbon offsets, busted
The carbon market is booming — and predicted to be worth up to $50 billion by 2030. If done right, its potential to raise funds for conservation could be huge: A recent analysis from We Mean Business Coalition found that if 1,700 of the world’s highest emitting companies compensated for just 10 percent of their emissions through carbon market investments, more than $1 trillion could be mobilized by 2030.
While companies view carbon credits as a critical component of climate action, they expressed concerns over credible and responsible engagement, according to the survey. More than a third of the companies surveyed are actively investing in the voluntary carbon market — yet they cited concerns over greenwashing, challenges in evaluating the quality of carbon credits and a lack of regulation and transparency as barriers to increasing investments.
“Companies are taking a very thoughtful approach to carbon markets, it’s not the Wild West out there,” said Luke Pritchard, nature-based solutions manager at We Mean Business. “They want to make sure they are engaging in a credible way and with high integrity.”
Several initiatives have emerged to bring greater transparency to the market and offer guidance for companies seeking to invest. This includes the work of the Integrity Council for the Voluntary Carbon Market, the Voluntary Carbon Market Integrity Initiative — and business-facing initiatives such as the Business Alliance to Scale Climate Solutions.
Last month, We Mean Business Coalition, in partnership with Conservation International, published guiding principles to help companies develop a climate transition plan. It includes cutting emissions across their value chains in line with science-based targets; better protecting, managing and restoring nature within companies’ value chains as a part of their emissions targets; and investing in protecting and restoring nature beyond their value chains — including by buying high-quality carbon credits.